Our customer is a large NZ company in the retail and trade building supplies industry that has a small team of dedicated buyers responsible for multiple product lines. They face the usual challenges of keeping on top of their contracts and ensuring that they have negotiated the best terms for all their product lines, while being able to focus the majority of their attention on the strategic purchases.
Our customer was on the market for a signage product to use for their marketing campaigns. They had used the same supplier for a while, and while they had no complaints, they wanted to test the market in an open, transparent and fair way to ensure that they were getting the best price. Their BEM had used a form of reverse auctions before and knew the potential that this procurement tool could offer. He liked eTrade Procurement’s webapp and knew that reverse auctions on his team’s mobile devices would work well for the company.
The product they were on the market for was fairly generic product that would have a number of suppliers. As it was their first auction, we helped them set up the auction (its part of the eTrade Procurement service offering) and we advised that given the nature of the product and a relatively large number of suppliers in the market, the eTrade Procurement Ranked Auction would be the best option. This mean that the suppliers could see their ranking but not the price their competitors had bid and so would likely stimulate healthy competition.
Before the pre-auction deadline, 4 suppliers accepted the invitation to be part of the online negotiation. As a result, the negotiation attracted a lot of interest from two suppliers in particular and our customer was more than satisfied with the +26% saving they achieved.
We were happy to help them achieve a great result from their first online negotiation with eTrade Procurement!
When Andrea talked about the success of the online auction with the BEM, he observed that “a good buyer can negotiate a good price but would struggle to beat this.”